Step-By-Step Guide to Cryptocurrency
On this page you will find everything you need to start making money with cryptocurrencies.
In the last few years Cryptocurrencies and Bitcoin, are getting gaining popularity. Many people are asking:
- Is it really possible to make money with cryptocurrencies?
- How to start with crypto?
- What are the first steps I should make?
- What are the most important things I need to know?
- Where and how can I buy?
- How can I make money with crypto?
- How much time do I need to make money with crypto?
In this step-by-step guide you will find the answers of these questions. You will also learn:
- To buy, sell, and transfer cryptocurrency
- How to sign up for a crypto exchange
- The basics of Bitcoin and Cryptocurrencies
- How Cryptocurrencies and Blockchain work
- How to protect your money from scammers
- Different ways to make money with crypto
- What is the safest way to store your crypto
- and much more…
Now, let’s begin with a short introduction of all important parts of the cryptocurrency ecosystem.
1. Cryptocurrency Basics
What are cryptocurrencies?
As the name suggests, cryptocurrencies are digital currencies that are secured by cryptography techniques and are electronic in nature. Cryptocurrencies do not have a physical form like paper money or coins which you probably have in your pocket right now. A cryptocurrency is a medium of exchange within a peer-to-peer (P2P) system, designed for the purpose of exchanging digital information through a process known as cryptography. The use of cryptography increases the security of information and transactions in the system and reduces the risk of fraud. The transaction and transfer of currencies are encrypted and independent of any central bank or authority. The real cryptocurrencies are decentralized, i.e., they don’t come under restrictions or regulations of any third party.
Most people confuse Bitcoin, Blockchain, and Cryptocurrency and think that they are nothing more but just different names for the exact same thing. Because of Bitcoin’s popularity and the speculative nature of cryptocurrencies, people think that they are only being used for digital transactions of funds, speculation, or like a getting-rich-quick scheme.
Currently, there are more than 24 000 cryptocurrency tokens on the crypto market.
Of course, many of these are not truly decentralized, have no fixed limited supply, do not have real encryption, or simply don’t have some of the characteristics of a real cryptocurrency.
Bitcoin is the first cryptocurrency in the world. Simply put, it is a digital form of cash, which can be sent from user to user on a peer-to-peer blockchain network. Unlike traditional fiat currency, there is no central bank, no intermediaries, or a single administrator controlling it. Each unit of Bitcoin is unique and cannot be copied or destroyed, and it runs on top of a distributed network. This network is completely decentralized and it is sustained by thousands of computers, the so-called nodes, spread around the world. As digital cash, Bitcoin is maintained by thousands of lines of code.
The primary value of a blockchain network is the ability to store, verify, distribute, and permanently record large amounts of data, including transaction records, allowing the removal of a trusted 3rd party.
Blockchain was introduced as the underlying technology that powered the biggest cryptocurrency – Bitcoin. Maybe that is the reason many people confuse Blockchain and Bitcoin and often think of them as the exact same thing.
Today, blockchain tends to get widely adopted into various sectors of the economy and many different industries. As there are already several thousand different cryptocurrencies, so there are also many different types of blockchain.
Think of it as the basic infrastructure for cryptocurrencies – if cryptocurrencies were cars, blockchain would be the roads.
A blockchain consists of a linear chain of multiple linked blocks that are cryptographically secured. Each block is a file made up of multiple components. It contains, among other things, a list of recent transactions and a reference to the block that was created right before it. Each validated block also contains a registered solution (block hash) of a complex mathematical problem, which is part of the process of Mining.
To understand how cryptocurrencies work, it is important to learn something about their creation – the so-called “mining”.
In broader terms, Cryptocurrency Mining is a complete process which is responsible for verification of transactions, introducing new coins to the system and marinating the uniformity of blockchain ledger. However, we should mention that there are different types of mining processes, and not all cryptocurrencies are available to be mined.
In order to be able to send, receive, and spend your crypto tokens, you need a cryptocurrency wallet. It is used to store the private keys of the cryptocurrencies that your own, keeping your crypto safe and accessible.
There are different types of wallets. These can be sorted into two major categories – hot wallets and cold wallets.
Hot storage or Software wallets = connected to the Internet
- Online wallets
- Desktop wallets
- Mobile wallets
- Exchange wallets
Cold wallets = offline storage
- Hardware wallets – Ledger Nano is one of the most used hardware wallets
- Paper wallets
Initial Coin Offering (ICO) is the cryptocurrency space’s rough equivalent to an IPO (for Stocks) in the mainstream investment world. This is the phase of a project that collects investors’ money before the official launch of the cryptocurrency token on the market.
Click here to learn more information about ICOs.
Use Cases (Problems – Solutions)
Cryptocurrency, blockchain technology, and innovation from this new sector can be used in various cases and in many different industries:
- Banking & Payments
- Finance & Investing
- Logistics & Transport
- Cyber Security
- Internet of Things
- Data Storage
- Digital Art – NFTs
- And many more.
Pros – Advantages
- Fast Transactions
- Borderless Transfers and Payments
- Open 24/7 – No Days Off, No Downtime
- Low Fees
- No Central Authority
- Non-Inflationary /when the supply of a currency is limited/
- Solution to the “double spending problem”
- Unchangeable and Public record of transactions
Cons – Disadvantages
- High Price Volatility
- Scalability issues – still not enough TPS – Read More
- Lack of Awareness & Understanding
- Full of fake crypto projects and scams
- Complicated – often not user-friendly
- Unregulated market
- Irreversible Transactions – No Chargebacks or Refunds
- Small market – easily manipulated
- Work in Progress – Ongoing development
2. Answer the Questions:
Why do you want to invest in cryptocurrencies?
What is your motivation behind the decision to invest your savings and your free time into crypto?
Although many people on the Internet are promoting Bitcoin and cryptocurrencies as a get-rich-quick scheme, it is not!
You really need to put in the work if you want to make life-changing money.
What is your exact goal?
How much money do you want to earn? What do you need it for?
Write it down on paper and look back to it daily. This will keep you focused along the way.
Do you have a step–by–step plan?
In order to achieve your goal, you need a realistic plan with steps that you will follow.
What is the deadline for your goal? Write it down.
How many hours per day are you ready to dedicate to executing your plan?
What are the steps that will lead to the achievement of your main goal?
Do you want to Invest or Trade?
There is a huge difference between Investing and Trading.
Investing is not so time-consuming and not as stressful as Trading.
You will need a lot more experience and self-control if you would like to trade short-term movements.
We have summarized the main differences between trading and investing:
Buy and Hold > 6 months
Buy & sell < 6 months
Idea / Product & Service / Team
** This is related to the cryptocurrency market.
What is your Risk Tolerance?
- Always use only money you can afford to lose!
- How much can you afford to lose in a worst-case scenario?
3. Do you have some free Capital & Savings?
Always invest only what you can afford to lose.
We repeat this over and over again, and still, there are people that take unreasonably high risks with their money. In other words – do not buy cryptocurrencies with the money you need for your rent, your groceries, or your credit bill.
You can start buying crypto with a little as 10 $.
Many people say that you need a lot of money to start investing. Actually, you can start buying and trading crypto on a centralized exchange – as Binance, or Coinbase, with a little as 10 $.
You can always earn more money
If you want to start investing, or you simply want to invest more, you can save more and even increase your monthly income if you:
- Sell some stuff that you don’t need or use anymore.
- Start a Side Hustle
- Best side hustles /insert photo/
- Freelance – register on websites like Fiverr and monetize your skills / Link/
Here you can find more about earning through Freelancing and Side Hustles.
4. Create a New Email Account
After you know the basics, you have a plan and some money to invest, it is time to create an account on a cryptocurrency exchange.
Before you do that, I strongly recommend you to create a new email account. You will be using it only for your cryptocurrency exchange profile.
Choose a trusted email provider like Gmail, Yahoo, Hotmail, etc.
Use a unique password specially and only for this email account.
Come up with a strong password – use different characters, signs, and numbers.
Verify and back up your new email account.
5. Create an account on a reliable Cryptocurrency Exchange
After you have set up your new email, it is time to sign up for a cryptocurrency exchange.
As you already know, there are tens of thousands cryptocurrency tokens on the market. Currently, there are over 600 crypto exchanges according to Coinmarketcap. You can see all of them HERE
Unfortunately, most of these exchanges are extremely unreliable and even fraudulent. Even some of the big cryptocurrency exchanges went bankrupt during previous bear markets. One of the latest was the crash of the FTX exchange.
And now comes the question:
How to choose an exchange?
- Personally, my team and I prefer bigger exchanges with proven record.
- Fees – what are the fees for depositing, buying, selling, and withdrawing on the exchange? You should be able to find this information on the official website of the exchange.
- Volume – daily trading volume is important for an exchange because it shows how much liquidity there is on it. If there is a big trading volume, then it’s easier to exchange currencies, and usually, there are more buyers and sellers. This means it will be easier for you to buy or sell crypto instantly.
- Number of users – if the exchange has just a few thousand registered users, it’s probably not the best place to put your money.
Best crypto exchanges
(my personal opinion)
- Binance – the biggest in the world
- Coinbase – US-based exchange founded in 2012.
How to sign up for Binance
1. Open the Binance Website or App and tap “Sign Up“.
2. Select a registration method. You can sign up with your email address, phone number, and Apple or Google account.
4. You will receive a 6-digit verification code in your email or phone. Enter the code within 30 minutes and tap “Submit“.
6. Protect and Store Your Cryptocurrency Tokens.
“Not your keys, not your crypto.”
- This is a popular saying in the world of cryptocurrencies – “Not your keys, not your crypto”. Anyone who has access to the private keys of your tokens is able to transfer your cryptocurrency to another wallet. Private keys are like the password to your online banking.
!!! You should protect your private keys at all costs !!!
- Never store your private keys in a document on your device. Do not write these in a Word file, Google Docs, or a similar application.
- Do not leave your cryptocurrency on a centralized exchange, because it will have full access to your private keys. If an exchange blocks the withdraws, the transfers, or your access to the platform, you will not be able to manage your funds. If an exchange declares bankruptcy or gets hacked, most probably, you will never be able to recover the tokens you have put into it. Use Hardware Wallet to store your crypto safely.
- It’s alright to leave your crypto on the exchange, only if you are going to trade often with it.
Diversify – do not store all of your cryptocurrency in one place
- If you have a large sum of money invested into crypto – use different exchanges and even different crypto wallets to minimize the risk of loss or damage.
- Any cryptocurrency company or exchange can get hacked or bankrupt. You should not rely on a single exchange or a single place to store your crypto. It’s good to have accounts on a few different exchanges. You can also use a few hardware wallets stored in different properties you have access to.
- Of course, if you have just a small amount of money in crypto, you can just go with a single crypto wallet.
Get Your Crypto Wallet
- The best choice you can make to secure your crypto is to use a Hardware Wallet. It stores private keys offline, making them independent of third parties and resistant to online threats.
7. How to secure your device and avoid losing your crypto
- Use a strong password – with different characters, signs, and numbers:
@ # ! ! * &
- Never write your passwords on a digital device
- Change your password often – every few months or weeks
- Never show your passwords to anyone. Use the “hide” option while you type in your passwords
- Use VPN – Virtual Private Network.” It’s a service that gives you safe and private access to the internet. By encrypting your connection, a VPN hides your IP, passwords, and online activity from spying eyes and keeps your data safe from cybercriminals.
- we use NordVPN
- Use this affiliate link to get a special deal with a price discount
- Always use Two-factor authentication (2FA)
- Avoid clicking on random links and emails, that look strange and could lead to a phishing attack
- You can add the links of the cryptocurrency–related websites you use often – such as exchanges, and research tools – to your taskbar. By using the saved link on your taskbar, you will minimize the risk of loading phishing websites with very similar domains.
8. Verify Your Profile on the Exchange
After signing up for an exchange, you will have to complete a verification process. Most of the big cryptocurrency exchanges will require you to fill out the so-called KYC (= Know Your Customer). This will take just a few minutes. You have to do it in order to use all of the features of the exchanges.
- You have to fill in your personal information – full name, current address, citizenship, etc.
- You will have to upload a photo of one official document – issued by the government – Passport, ID card, or a Driving License
- In addition to that, you will need to upload a copy of a document, that confirms your current address. You can use a utility bill or other official document, issued in the last 3 months.
- Some exchanges will require a photo or video of you holding a sheet of paper with the current date handwritten on it.
- Others will require you to have a short verification video call with a member of their staff. For example, Binance and Bybit would like you to make a short real-time video of yourself with the camera of your device.
- The whole verification process isn’t something unusual. It is required by governments around the world, in order to prevent criminal activities and money laundering done through cryptocurrencies. At least that is the official version.
9. Deposit Fiat Currency
In order to buy your first cryptocurrency tokens, you will need to use your traditional currency or the so-called Fiat money. The easiest way to exchange your dollars, euro, or other national currency, for cryptocurrency is on a centralized exchange.
Each exchange has a different process of depositing and withdrawing money. Some of the steps are often being changed, because of new national regulations or changes in the website policy.
Here is How to Buy Crypto with a Credit/Debit Card on the biggest cryptocurrency exchange – Binance – step-by-step:
1. Sign up and Log in to your Binance account.
2. Log in to your Binance account and click “Buy Crypto” – then “Credit/Debit Card“.
3. You can choose to buy crypto with different fiat currencies. Enter the fiat amount you want to spend, and the system will automatically display the amount of crypto you can get.
4. Click “Add new card“.
5. Enter your credit card details. Please note that you can only pay with credit cards in your name.
6. Enter your billing address and click “Add Card“.
7. Check the payment details and confirm your order within 1 minute. After 1 minute, the price and the amount of crypto you will get will be recalculated. You can click “Refresh” to see the latest market price. The fee rate is approximately 2% per transaction.
8. You will be redirected to your bank’s OTP transaction page. Follow the on-screen instructions to verify the payment.
9. After the order is completed, you can go to [Wallet] – [Overview] to check whether the cryptocurrency has arrived.
10. If you would like to view your purchase history, click on [Orders] – [Buy Crypto History].
10. Buy Crypto
- Go to the Spot from the menu
2. Place an order – you can choose between:
- Stop Order
- Set the Price you are ready to pay and the Amount of tokens you want to buy
- Double-check everything. Never rush while doing this.
- Click “BUY”
- Once you have placed your order, it has to be filled
- Go to your Spot Wallet and look if your tokens are there.
11. Sell Crypto
If you would like to sell your crypto:
- Go to the Spot from the menu
2. Place an order
- Set the Price you are willing to sell your tokens for and the Amount of tokens you want to sell
- Double-check everything. Never rush while doing this.
- Click “SELL”
- The status of the order will change to “filled” once it’s fulfilled
- Go to your Spot Wallet and check if the transaction is properly done.
12. Withdraw Crypto
You can withdraw your cryptocurrency by transferring it to your external wallet or to another exchange.
!!! Each Cryptocurrency has a different wallet address !!!
That is one of the most important facts you should remember. If you send any of your coins to the wrong address, these will be lost forever.
Here is how to withdraw your crypto from Binance – step-by-step:
- an email with a code
- a text message on your mobile device with a code
- a code in your Two-factor authentication (2FA) App
13. Deposit Crypto
- Log into your Binance account and click “Wallet” – and then “Overview“.
2. Click “Deposit” and you will see a pop-up window.
3. Click on “Crypto Deposit“.
4. Select the cryptocurrency you want to deposit, for example – Ethereum.
5. Next, choose the deposit network. Please make sure that the selected network is the same as the network of the platform you are withdrawing funds from. If you select the wrong network, you will lose your funds. For example – ERC20 (Ethereum blockchain) deposit network.
6. Click to copy your Binance Wallet’s deposit address and paste it to the address field on the platform you intend to withdraw crypto from. Alternatively, you can click the QR code icon to get a QR code of the address and import it to the platform you’re withdrawing.
7. After confirming the deposit request, it takes time for the transaction to be confirmed. The confirmation time varies depending on the blockchain and its current network traffic. Once the transfer is completed, you will be able to see the funds in your Binance account wallet.
14. How to Find the Best Cryptocurrency Investments
Today, there are more than 24 000 cryptocurrencies in the world. Anyone can create a new token in a matter of seconds with just a few clicks. Every day new projects emerge and their tokens are being listed on the market.
- You can use different tools to find and research cryptocurrencies.
- Coinmarketcap.com – It is a price-tracking website, a source for Bitcoin BTC & Crypto news, coin stats, and crypto charts. It is the most referenced and trusted source for comparing thousands of cryptocurrencies in the rapidly growing crypto space by users, institutions, and media.
- Go to Coinmarketcap – and find the cryptocurrency you want to research using the search bar.
- Is the token already launched on the market? If there is no active price chart and no market cap, it is probably still not listed.
- Click on “Markets” to see on which exchanges it is listed
- What is its market cap – if it is under 50 million USD is very small – has high reward potential, but also very high risk
- What is its all-time high (ATH) price?
- What is the current price of the token? Is it far below its ATH or it’s not?
- Visit their official website. Does it look trustworthy, presentable and professionally made? Does it provide enough valuable information about the
project? Can you find a Whitepaper and a Roadmap with all milestones and deadlines for each one of them on the website?
- Visit their social media channels. How many followers do these have? How active is the community? Is the team engaged with the community (answering comments, and creating new content every week)?
- TradingView.com – one of the best tools for viewing price charts and doing your technical analysis.
We use Trading View for our chart analysis. It is a charting platform and social network for traders and investors. It has all of the tools you need to make a proper technical analysis of the price charts. You can use all kinds of drawing tools and trading indicators to make the best price prediction. Just sign up for free and you will be good to go. There are paid premium versions with some cool extra features, but you don’t really need these as a beginner.
- We have created two free checklists for you full of useful information. The first list will help you find the best cryptocurrency projects, to buy and hold as a long-term investment. It has over 90 useful criteria which can help you analyze each project in detail and make the best investment decisions. The second checklist will help you avoid scams and fraud. It can help you protect your money and save you thousands of dollars.
Get Your FREE Checklists & Find The Best Crypto Investments
15. Investing Rules
- Be prepared for a wild ride – prepare psychologically and emotionally
- Invest only what you can afford to lose!
- You will have both successful and unsuccessful investments – both winnings and losses.
- Crypto is not a get-rich-quick scheme
- DYOR or Do Your Own Research! Do your own damn research before putting your money at risk.
- Buy Low, Sell High.
- Set your Goals before you start
- Make your own investing plan – with your goals, steps, and deadlines.
- Diversify – Never put all your eggs into one basket
- Always have a look at the sentiment on the major financial markets.
- Evaluate the overall situation on the cryptocurrency market
- What does Bitcoin’s price? Remember, that Bitcoin is still the market leader. Its price movements often have a big impact on all other cryptocurrencies.
16. Technical Analysis
- Trading View tradingview.com
Open Trading View and search for the trading pair you would like to analyze. For example – USDT/BTC.
Start with the Trend:
- What is the current Trend of the price action on the chart?
- This is the very first thing you need to determine. Is there a UP-trend, a DOWN-trend, or Sideways moves in a Range?
- Start from the longer time frame and move down to the shorter:
- Week > Day > Hours > Minutes
Here are some of the most popular chart patterns.
Here are some of the most popular candlestick patterns.
- RSI – Relative Strength Index
- MA – Moving Average
- Are there any signs of continuation or reversal of the trend /carousel- pictures/
17. Trading Rules
- Before you place a trade – write down your entrance, stop-loss, and take-profit prices.
- Always use a Stop-Loss!
- Larger Time frames Dominate the Trend. The signals you see on a bigger time frame are stronger than those on a smaller time frame.
- Monthly Trend > Weekly Trend > Daily Trend > Hourly Trend
- The trend is your Friend! Never trade against the trend! You must have a lot of experience to make trades against the trend.
- Trade AGAINST your EMOTIONS!
- Take NOTES! Follow your progress and learn from your experience
- Write down and analyze every single order (buy/sell) you make.
- Review your trading journal each morning, before you start trading.
- Do NOT Overtrade!
- Avoid revenge trading.
Many people underestimate this part of the equation. It is important to research this topic even before you make your first trades and investments.
There are countries that have more crypto-friendly tax policies than others. For example – in Germany, if you hold your crypto for over a year as an individual, you do not have a tax liability on your earnings. In other words, for long-term holdings over 365 days, any increase in the value of your cryptocurrency, and every profit you make from it is tax-free.
- Long-term trade example:
You purchase €1000 worth of Bitcoin.
More than 365 days later, you sell the same amount of Bitcoin for € 5000.
Your € 4000 earnings are not taxable.
19. Useful Websites, Apps & Tools
There are many tools that can help you throughout your journey in the world of cryptocurrencies.
- Click Here to see all of the tools, websites, and apps we use to research cryptocurrency investments and trades.
Now, that you know the basics of the crypto world, you can dive into it further and explore. There are so many opportunities to make money, to create, to invent.
- What to do next?
- NFTs = Non-fungible tokens
- Learn more about NFTs
- The world is changing fast
- You have the opportunity to change your life